The end of the meme coin era or a pause before new growth?

Meme coins have become a true cultural phenomenon and even formed a separate segment of the crypto market. As of August 2025, the market capitalization of meme coins stands at $74.3 billion, while at its peak in December 2024, it even rose above $123 billion.

However, meme coins are mostly backed by nothing but social hype, which makes them prone to rapid rises as well as sharp declines. If we analyze major meme coins, it becomes clear that the segment is in a significant downturn: many of these tokens have fallen in price by 80–90% or more since January 2025.

Current market dynamics of meme coins

The current market capitalization of meme coins is even lower than the peak values of 2021, even though the number of meme coins has grown significantly over the past four years. On CoinMarketCap alone, there are more than 4,700 meme coins registered.

Only nine meme coins have a capitalization exceeding $1 billion:

• Dogecoin (DOGE) — $34.73 billion
• Shiba Inu (SHIB) — $7.64 billion
• Pepe (PEPE) — $4.67 billion
• Pudgy Penguins (PENGU) — $2.11 billion
• Bonk (BONK) — $1.96 billion
• Official Trump (TRUMP) — $1.83 billion
• SPX6900 (SPX) — $1.44 billion
• Fartcoin (FARTCOIN) — $1.02 billion
• Floki (FLOKI) — $1.01 billion

Daily trading volume has also dropped significantly: while at its peak in 2021 this figure exceeded $35 billion, by August 2025 it had fallen to just over $11 billion. According to analysts, this indicates an outflow of speculators and declining interest from retail investors.

Among the main reasons for the meme coin slump, experts cite the lack of fundamental value. Such assets can only show explosive growth during periods when market euphoria prevails. A vivid example is the spikes in meme coin prices in November 2021 and December 2024, when Bitcoin reached new all-time highs.

According to James Montgomery, a crypto economist at the MIT Media Lab, meme coins are financial bubbles based on virality rather than technology or utility: they solve no real-world problems, have no decentralized governance protocols, and their value depends entirely on hype.

As a rule, most meme coins have almost no use cases, roadmaps, clear action plans, strong development teams, or well-thought-out tokenomics. Even having a developed ecosystem does not guarantee success.

For example, the Shiba Inu ecosystem includes its decentralized exchange, ShibaSwap, as well as an NFT marketplace and a metaverse. However, according to Dune Analytics, from 2022 to 2024, activity on ShibaSwap dropped by 91%, and the number of daily active wallets decreased to 12,000.

Why are meme coins losing value so sharply?

Meme coins are most sensitive to macroeconomic factors and market corrections. When the cryptocurrency market crashes, meme coins generally lose more value compared to so-called "fundamental altcoins" (Ethereum, Cardano, Solana).

For example, after the rapid growth of December 2024, in just four months, Ethereum fell from $3,800 to $1,500 — about 2.5 times. Over the same period, the largest meme coin Dogecoin dropped more than 3x — from $0.46 to $0.14. Smaller-cap meme coins like Shiba Inu (SHIB), Pepe (PEPE), and Bonk (BONK) fell even harder.

It's also worth noting that, except Dogecoin (DOGE), meme coins are absent from institutional investor portfolios. The situation is further complicated by regulatory pressure. For example, the SEC has classified the top meme coins by market cap — DOGE, SHIB, and PEPE — as securities, creating legal uncertainty among crypto investors.

According to crypto lawyer Emily Chan, if the Securities and Exchange Commission officially recognizes meme coins as securities, it will lead to their mass delisting from centralized exchanges, as well as a blow to the liquidity and trust in such crypto assets.

Mentions by influencers on social media have also greatly influenced meme coin price movements. For example, before 2022, almost every Elon Musk tweet about Dogecoin could trigger a price spike of 20–40% or more.

However, between 2022 and 2024, analysts noted that social media activity related to meme coins dropped by more than 70%. Although new players like dogwifhat (WIF), Official Trump (TRUMP), and Fartcoin (FARTCOIN) tried to "revive" the meme coin market, the downward trend continues.

What's next?

Some experts believe that the meme coin decline is temporary and will inevitably be followed by a new growth cycle. Others point out that this downturn is the result of accumulated structural problems, changes in market conditions, and growing maturity among crypto investors.

According to various forecasts, by the end of 2025, meme coins could lose another 40–60% of their capitalization. Major crypto exchanges like Coinbase and Kraken are already beginning to delist meme coins. High volatility, lack of dividends or utility, and regulatory uncertainty make meme coins unsuitable for long-term portfolios, especially for large investors.

However, experts believe that new viral trends — for example, those related to artificial intelligence (AI) and other "hype" news drivers — could rekindle investor interest.

The situation could also be affected by the "re-engineering" of meme coins — giving tokens utility functions and creating a technologically advanced and in-demand ecosystem for each asset. For example, integrating Dogecoin with Layer 2 (L2) solutions that support smart contracts could enable the creation of DeFi applications, expanding the use cases for DOGE and potentially increasing its fundamental value.

According to analysts, if at least a few meme coins are given utility functions, the sector could partially recover by 2027, with the capitalization of this segment stabilizing at $100–120 billion.